What we doAdvisory & ConsultancySustainable & Transition Finance
Every label you can evidence, every transition you can judge.
A bank’s sustainable finance business now answers to several reference points at once: the ICMA Principles and the loan market principles for labelled bonds, sukuk and loans, the Basel Committee’s June 2022 principles on climate-related financial risks, and IFRS S2 where it has been adopted. Each asks the bank to show its working. A framework that labels deals it cannot evidence, or lends to transition clients it has not assessed, carries greenwashing risk and credit risk at the same time — and both surface long after the deal is booked.
Where this begins
Three conversations this practice usually starts with.
A framework written before the market moved
The bank’s sustainable finance framework was approved several years ago. Since then ICMA has updated the Green Bond and Social Bond Principles (June 2025 editions), and the Green Loan and Sustainability-Linked Loan Principles were updated in March 2025. Nobody has checked whether eligibility criteria, KPI rules and reporting commitments still match what investors and borrowers now read.
Transition clients the credit committee cannot judge
High-emitting clients present decarbonisation plans and ask for transition or sustainability-linked financing. Relationship managers want to support them; the credit committee has no consistent way to tell a credible plan from a well-written one, and no view on what happens to the exposure if the plan slips.
Climate risk sits with sustainability, not with credit
Climate-related risk is discussed in the sustainability report and the ICAAP narrative, but it does not reach the credit memo, the sector limits or the watch list. The Basel Committee’s principles expect it inside risk management, not beside it.
What we deliver
Every label defensible, every risk in the credit file.
A sustainable finance engagement leaves the bank able to label, lend and disclose with confidence: the framework aligned with current market standards, transition clients assessed consistently, greenwashing controls in place, climate risk inside the credit process and IFRS S2 readiness known. The deliverables are working documents, prepared with your sustainable finance, credit, risk and finance teams.
Sustainable finance framework review
The framework for green, social, sustainability and sustainability-linked loans, bonds and sukuk reviewed against the ICMA Green Bond and Social Bond Principles (June 2025), the Sustainability-Linked Bond Principles (June 2024), the Green Loan and Sustainability-Linked Loan Principles (March 2025) and the April 2024 guidance on green, social and sustainability sukuk from ICMA, the Islamic Development Bank and LSEG.
Transition-plan assessment of clients
A consistent approach for credit and relationship teams to assess a client’s transition plan — targets, interim milestones, capital expenditure, governance and dependencies — with the questions to ask, the evidence to expect and the way the conclusion reaches the credit decision.
Greenwashing controls
The control set behind every labelled deal: eligibility evidence, KPI materiality and target calibration for sustainability-linked structures, allocation and impact reporting, external review, and the governance that decides what may carry a label — mapped to where claims are made, from term sheets to marketing.
Climate-risk integration into credit
Climate-related risk drivers taken from policy into the credit process — origination criteria, sector guidance, credit memo content, limits and monitoring — reviewed against the Basel Committee’s June 2022 principles for the effective management and supervision of climate-related financial risks.
IFRS S2 disclosure readiness
A gap assessment of governance, strategy, risk management, and metrics and targets against IFRS S2 Climate-related Disclosures, with the data the disclosures need traced to its source and the open judgements listed for the people who must sign them.
How the engagement runs
Assess. Align. Embed. Disclose.
Assess
Framework, labelled portfolio, credit process and disclosures reviewed against current market standards and supervisory expectations — delivered in weeks, with the gaps ranked.
Align
Eligibility criteria, KPI rules, transition-assessment questions and labelling governance revised and documented with your teams.
Embed
Climate risk and transition assessment taken into credit policy, memos, limits and monitoring, so they change decisions rather than describe them.
Disclose
Allocation and impact reporting and IFRS S2 readiness checked against what the bank actually does — then ownership handed over.
Perimeter and fee are fixed at the diagnostic — engagements are scoped to a defined end: a framework, credit process and disclosure the bank can explain and defend.
Questions we are asked
Before the first conversation.
What is the difference between green, sustainability-linked and transition finance?
Green, social and sustainability instruments are use-of-proceeds products: the money is earmarked for eligible projects. Sustainability-linked instruments are general-purpose: the pricing or terms move with the borrower’s performance against agreed targets. Transition finance supports clients in high-emitting activities moving towards lower emissions, and turns on whether their transition plan is credible. A bank usually needs all three, with different controls for each.
Which market standards should a bank’s framework reflect?
For bonds, the ICMA Green Bond and Social Bond Principles, updated in June 2025, and the Sustainability-Linked Bond Principles of June 2024. For loans, the Green Loan Principles and Sustainability-Linked Loan Principles, updated in March 2025. For sukuk, the guidance published by ICMA, the Islamic Development Bank and LSEG in April 2024. These are voluntary market standards; local taxonomies and rules apply on top where they exist.
How should climate risk reach the credit process?
The Basel Committee’s principles for the effective management and supervision of climate-related financial risks, published in June 2022, aim to improve banks’ risk management and supervisors’ practices in this area. In practice that means climate-related drivers appearing where credit decisions are made — origination, credit memos, sector limits and monitoring — rather than only in the sustainability report.
Does the bank need to report under IFRS S2?
IFRS S2 was issued by the ISSB in June 2023 and is effective for annual reporting periods beginning on or after 1 January 2024, but whether and when a bank must apply it depends on what its jurisdiction has adopted. A readiness assessment is useful either way, because the disclosures rest on the same governance, risk management and data a bank needs to manage climate risk at all.
Will you tell us a deal should not carry a label?
Yes, when the evidence does not support it. A label that cannot be defended is a liability for the bank and its client, and saying so before the deal is marketed is cheaper than saying so afterwards. We prepare the analysis; the decision to label, lend or disclose remains the bank’s.
Background reading on this subject
Written by the practitioners who lead the programme — read before you enquire.
The Capability Arc™
This practice is one point on the arc.
Most sustainable finance clients pair the engagement with the programmes that build the internal bench — the green, social and sustainability-linked finance course, Transition Finance for Banks, ESG and Climate Risk Stress Testing, and the IFRS S2 masterclass — because labels and transition judgements have to be owned by the people who sign the deals.
Learn it · Training
Green, Social & Sustainability-Linked Finance: Loans, Bonds and Sukuk
Two days on use of proceeds, sustainability-linked structures, sukuk and greenwashing risk — for corporate banking, debt capital markets, credit and ESG teams.
Fix it · Advisory
Stress Testing & Scenario Governance
When climate and transition scenarios have to reach capital, liquidity and the board’s decisions.
Automate it · Smart IT
Risk Data, Controls & MI (BCBS 239)
When climate and sustainability data has to reach credit, risk and disclosure from one governed source, with lineage and controls.
The ask
Ask for a confidential sustainable finance review.
A senior practitioner reads your sustainable finance framework, a sample of labelled deals and the way climate risk reaches your credit process — and tells you, in a private working session, where the framework has fallen behind current standards, where greenwashing risk is concentrated, and what would need to change first.
Confidential by default; under NDA on request. A senior practitioner replies within two working days.
Sustainable & Transition Finance
Leave the question with us.
Two lines on the mandate is enough — a senior practitioner replies within one business day.